Detroit Institute for Children closes outpatient clinics

The Detroit Institute for Children last week shut down three outpatient clinics serving 250 special needs children to focus more resources on the institute’s larger school program that provides services to more than 4,500 children.

“It was a difficult decision to make and filled with lots of emotion,” said Mike Rhoads, the institute’s director of school services. “The last couple years we had a reduction in the volume of patients relative to changes in the health care industry.”

Rhoads said the institute wants to expand its school services program. An advisory board composed of school principals and parents will make recommendations on what additional services are needed.

Some 27 employees, including 17 therapists, who staffed the outpatient clinics were laid off, said Marge Resmer LaRuffa, the institute’s COO. Clinic locations were in Detroit, Clawson and St. Clair Shores.

Cost savings for the institute were unavailable. The clinics ran a deficit and were supported by charitable donations, LaRuffa said. The institute provided $2.5 million in uncompensated care each year, according to its website.

LaRuffa said health benefit changes over the past several years, including those contained in the Affordable Care Act, have resulted in fewer patients seeking care at the institute’s clinics. She could not estimate the percent decline over the last few years.

However, LaRuffa said reimbursement reductions from insurance companies contributed to the decline in patient volume, along with coverage denials by insurers for services the institute provided the children.

“More recently, our struggles were related to how much insurance companies would reimburse us,” LaRuffa said. “Insurance companies wouldn’t authorize services for children. They told parents they should be receiving those services in schools.”

LaRuffa said physician services were offered at the clinics for many years until about 2010. “We constantly needed to reduce staff because our schedules weren’t full,” Rhoads said.

LaRuffa said several other pediatric clinics in Southeast Michigan have closed for similar reasons over the last few years.

“There are private clinics, but most don’t take Medicaid. Hospitals will take Medicaid for a limited amount of time, but there are long waiting lists,” LaRuffa said.

Rhoads and LaRuffa said the institute is doing its best to refer parents of children seen at the clinics to other resources.

“We have been working with a number of organizations to transition the children to therapists,” LaRuff said. “We are not turning our backs on these families. While we aren’t providing these services, we want to make sure those services continue for the families.”